BANGALORE | NEW DELHI: SMS GupShup, the country’s largest mobile social network, has raised close to Rs 50 crore from a host of venture capital investors, valuing the six-year-old company at Rs 1,000 crore. The funding was led by US-based venture capital firm Tenaya Capital and included existing investors Lloyd George, New Horizons, Charles River Ventures, Helion Ventures and Globespan Capital Partners. This is the fifth round of funding for the Mumbai-based group messaging provider and underlines the rising valuations for start-ups that use mobile and internet technology to acquire large user bases. It is also raising concerns about the high valuations that start-up companies in some segments have been accorded by investors. SMS GupShup, which has 50 million users, is targeting Rs 100 crore in revenue by the end of March 2012. It has been valued at 10 times its projected revenue. “A company at our stage, which is not yet profitable but has substantial revenues, is valued on the basis of revenue multiplier,” said Beerud Sheth, the co-founder. In January 2010, when the company raised $12 million, it was valued at three times its projected revenue. Among those sceptical about the steep increase in valuations for some start-ups… Read full this story
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